A clarification

In my theory-heavy post on the EMH earlier this week, it appears as though my example about Company X was misleading. As a blogger at Free Exchange pointed out:

...anyone who understands the efficient market hypothesis knows it is a long-run equilibrium condition, which means deviations from equilibrium (bubbles) can and do occur. Does it predict them, no? But it is not the scope of EMH to describe and predict short-run deviations.

So there you go - I was using a poor example. But the main argument of the post still holds.